Should I keep my TOMS transport company?
If you sell no UK travel at all, and don't plan to, I would advise that you consider winding the transport company up. Please do ensure that this is done fully and properly - i.e. that all contracts, other documents and accounting reflect this change, and take advice if you are not sure.
For those selling UK travel, we have been hoping that HMRC will accept that UK-based transport can be treated as zero rated within the main UK TOMS calculation. This has not yet been agreed so I would advise UK businesses selling UK transport under TOMS to apply caution for the time being. With this in mind, the TOMS transport company scheme may still be very useful if you:
- Sell travel taking place solely within the UK; or
- Sell travel which takes place partly in the UK.
If your UK travel is minimal, this may be a judgement call - for example, if your main business is EU travel but you occasionally sell a UK holiday and so have a few minor costs of UK coaches, rail or domestic flights only, keeping the transport company may still be more of a cost than a benefit. However, for businesses with UK transport costs of more than £10-15k, the transport company would usually remain beneficial overall. As such, you should review this for your own business circumstances.
Please note that the EU VAT position for EU travel is remains uncertain and I would still advise all tour operators selling EU travel to keep updated on this and assess the future risks for your business. You can read further on this point here. However, importantly, if EU registrations are required later down the line, having a transport company will not alleviate this. In fact, arguably, a transport company would be a disadvantage here in that both companies would be required to register in the member state in question.
Please contact me on 07971 642789 and firstname.lastname@example.org if you have any questions or would like to discuss your own transport company.